Panama Population: 3,559,408

Explored and settled by the Spanish in the 16th century, Panama broke with Spain in 1821 and joined a union of Colombia, Ecuador, and Venezuela - named the Republic of Gran Colombia. When the latter dissolved in 1830, Panama remained part of Colombia. With US backing, Panama seceded from Colombia in 1903 and promptly signed a treaty with the US allowing for the construction of a canal and US sovereignty over a strip of land on either side of the structure (the Panama Canal Zone). The Panama Canal was built by the US Army Corps of Engineers between 1904 and 1914. In 1977, an agreement was signed for the complete transfer of the Canal from the US to Panama by the end of the century. Certain portions of the Zone and increasing responsibility over the Canal were turned over in the subsequent decades. With US help, dictator Manuel NORIEGA was deposed in 1989. The entire Panama Canal, the area supporting the Canal, and remaining US military bases were transferred to Panama by the end of 1999. In October 2006, Panamanians approved an ambitious plan (estimated to cost $5.3 billion) to expand the Canal. The project, which began in 2007 and could double the Canal's capacity, is expected to be completed in 2015.

3 November 1903 (from Colombia; became independent from Spain on 28 November 1821)

National holiday:

Independence Day, 3 November (1903)

Constitution:

11 October 1972; revised several times

Legal system:

civil law system; judicial review of legislative acts in the Supreme Court of Justice

Suffrage:

18 years of age; universal and compulsory

Executive branch:

chief of state: President Ricardo MARTINELLI Berrocal (since 1 July 2009); Vice President Juan Carlos VARELA Rodriguez (since 1 July 2009); note - the president is both the chief of state and head of government

cabinet: Cabinet appointed by the president (For more information visit the World Leaders website )

elections: president and vice president elected on the same ticket by popular vote for five-year terms (president not eligible for immediate reelection and must sit out two additional terms (10 years) before becoming eligible for reelection); election last held on 3 May 2009 (next to be held in May 2014)

note: the ruling government coalition - formerly comprised of CD (Democratic Change), Panamenista Party, MOLIRENA (Nationalist Republican Liberal Movement), and UP (Patriotic Union Party) - split in August 2011 when President MARTINELLI relieved Vice President VARELA from his position as Foreign Minister prompting the Panamenistas to pull out of the coalition; UP has now merged with CD, and CD and the Panamenista Party will now run separate candidates for the presidency in 2014

Legislative branch:

unicameral National Assembly or Asamblea Nacional (71 seats; members elected by popular vote to serve five-year terms)

elections: last held on 3 May 2009 (next to be held in May 2014)

election results: percent of vote by party - NA; seats by party - PRD 26, Panamenista 22, CD 14, UP 4, MOLIRENA 2, PP 1, independents 2; note - changes in political affiliation now reflect the following seat distribution: as of 13 February 2013 - seats by party - CD 36, PRD 17, Panamenista 13, MOLIRENA 4, PP 1 note: legislators from outlying rural districts are chosen on a plurality basis while districts located in more populous towns and cities elect multiple legislators by means of a proportion-based formula

Judicial branch:

highest court(s): Supreme Court of Justice or Corte Suprema de Justicia (consists of 9 magistrates and 9 alternates and divided into civil, criminal, administrative, and general business chambers) judge selection and term of office: magistrates appointed by the president for staggered 10-year terms

Chamber of Commerce Concertacion Nacional (mechanism for government of Panama to formally dialogue with representatives of civil society) National Council of Organized Workers or CONATO National Council of Private Enterprise or CONEP National Union of Construction and Similar Workers (SUNTRACS) Panamanian Association of Business Executives or APEDE Panamanian Industrialists Society or SIP Workers Confederation of the Republic of Panama or CTRP

Panama's dollar-based economy rests primarily on a well-developed services sector that accounts for more than three-quarters of GDP. Services include operating the Panama Canal, logistics, banking, the Colon Free Zone, insurance, container ports, flagship registry, and tourism. Economic growth will be bolstered by the Panama Canal expansion project that began in 2007 and is estimated to be completed by 2015 at a cost of $5.3 billion - about 10-15% of current GDP. The expansion project will more than double the Canal's capacity, enabling it to accommodate ships that are too large to traverse the existing canal. The United States and China are the top users of the Canal. Panama is also constructing a metro system in Panama City, valued at $1.2 billion and scheduled to be completed by 2014. Panama''s booming transportation and logistics services sectors, along with aggressive infrastructure development projects, have lead the economy to continued high growth in 2012. Foreign investment, at around 10% of GDP in both 2011 and 2012, has continued to be a source of growth. Strong economic performance has not translated into broadly shared prosperity, as Panama has the second worst income distribution in Latin America. About 30% of the population lives in poverty; however, from 2006 to 2012 poverty was reduced by 10 percentage points, while unemployment dropped from 12% to 4.4% of the labor force in 2012. The US-Panama Trade Promotion Agreement was approved by Congress and signed into law in October 2011, and entered into force in October 2012. Panama also achieved removal from the Organization of Economic Development''s gray-list of tax havens by signing various double taxation treaties with other nations.

international: country code - 507; landing point for the Americas Region Caribbean Ring System (ARCOS-1), the MAYA-1, and PAN-AM submarine cable systems that together provide links to the US and parts of the Caribbean, Central America, and South America; satellite earth stations - 2 Intelsat (Atlantic Ocean); connected to the Central American Microwave System (2011)

On 10 February 1990, the government of then President ENDARA abolished Panama's military and reformed the security apparatus by creating the Panamanian Public Forces; in October 1994, Panama's Legislative Assembly approved a constitutional amendment prohibiting the creation of a standing military force but allowing the temporary establishment of special police units to counter acts of "external aggression"

Military branches:

no regular military forces; Panamanian Public Security Forces (subordinate to the Ministry of Public Security), comprising the National Police (PNP), National Air-Naval Service (SENAN), National Border Service (SENAFRONT) (2013)